India emerges as global growth powerhouse amid shifting economic landscape: IMF chief


Daijiworld Media Network - Washington

Washington, Oct 9: International Monetary Fund (IMF) managing director Kristalina Georgieva has hailed India as a rising pillar of global economic growth, noting that the country's momentum stands out amid a broader global slowdown. Speaking ahead of the annual IMF-World Bank meetings, Georgieva acknowledged India’s transformation into a "key growth engine" as other major economies, particularly China, experience a steady deceleration.

Georgieva remarked that global growth is now expected to average around 3 per cent over the medium term — a significant drop from the pre-pandemic average of 3.7 per cent. Against this backdrop, India’s continued expansion offers a rare bright spot. She cited improved policy fundamentals, adaptability in the private sector, and relatively moderate trade tensions as contributing factors to global stability, but warned that the world economy has yet to face its ultimate test of resilience.

While tariffs in the US have eased somewhat — falling from 23 per cent in April to 17.5 per cent — Georgieva cautioned that the full impact of such trade measures has yet to be fully realised. The global economic system, she said, is navigating "worrying signs" that a more significant stress test could be on the horizon.

India, however, appears to be bucking the trend. The World Bank recently revised its growth forecast for the country to 6.5 per cent for FY26, up from 6.3 per cent. Similarly, the Reserve Bank of India (RBI) has upgraded its projection to 6.8 per cent, citing strong domestic consumption and the impact of key structural reforms such as the streamlining of the Goods and Services Tax (GST).

India’s GDP surged by 7.8 per cent in the April–June quarter of FY2025–26 — the highest in five quarters — powered by strong private consumption and increased fixed investment. On the supply side, gross value added (GVA) grew by 7.6 per cent, buoyed by a resurgence in manufacturing and consistent growth in the services sector.

High-frequency data indicates that economic activity in India remains robust. A favourable monsoon has bolstered rural demand through a strong agricultural performance, while urban consumption is gradually picking up pace. RBI Governor Sanjay Malhotra noted that these indicators support the outlook for sustained growth, even as the country navigates external economic challenges.

  

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Title: India emerges as global growth powerhouse amid shifting economic landscape: IMF chief



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